Lasting Power of Attorney and a Will

Finance

How Can You Protect Your Money with a Lasting Power of Attorney and a Will?

By Ann Haldon

Lasting Powers of Attorney (LPAs) are legal documents that help to protect your money if you’re unable to manage your own finances for any reason. Wills contain instructions on how your money should be distributed when you die. So why should you make a Lasting Power of Attorney and a Will, and how do you do it? Let’s start by looking at Lasting Powers of Attorney.

What is a Lasting Power of Attorney and why do you need one?

A Lasting Power of Attorney is a document that appoints one or more individuals (attorneys) to make decisions and act on your behalf (the donor) in relation to your property, finances, health and welfare. Should you suffer a stroke, lose mental capacity or experience a debilitating ailment, a Lasting Power of Attorney ensures important aspects of your life are taken care of by one or more individuals you trust.

Setting up a Lasting Power of Attorney

You can ask a solicitor to draw up these documents for you or set them up yourself. If you decide to set up a Lasting Power of Attorney yourself, you must be over eighteen and have the mental capacity to do so. There are two types of Lasting Power of Attorney: • Property and financial affairs • Health and welfare You can download the forms from the gov.uk website or complete them online. They must be registered with the Office of the Public Guardian before they can become effective, which currently costs £82 per document.

What is a Will and why do you need one?

A Will documents your wishes regarding what happens to your money, property and possessions when you die. This may be a straightforward instruction to pass your entire estate to your spouse, for example, but some situations are more complex. A Will allows you to decide in advance who will inherit your money and possessions. Making a Will helps you avoid inheritance tax, or reduce it – inheritance tax currently stands at 40% and applies to some deceased estates over £325,000.¹

How do you make a Will?

As with a Lasting Power of Attorney you can ask a solicitor or professional Will writer to make your Will or you can do it yourself. Some charities also offer free or reduced cost Will-writing services in return for a donation, so this may be worth considering. It’s sensible to seek professional assistance in drawing up your Will if your circumstances aren’t straightforward. If you do decide to write your own Will, you can buy ‘blank’ templates that provide simple guidance and example wording at stationery stores and online. You’ll need to consider who to appoint as your Trustee(s) and who will inherit your money and possessions. Drawing up a Lasting Power of Attorney and a Will protects your money if you fall ill or lose mental capacity, and in the event of your death. Writing these documents is an important consideration at any age, but it becomes more so as you get older – a time when your health may be more likely to fail.

¹www.gov.uk/inheritance-tax www.gov.uk/power-of-attorney www.which.co.uk/money www.moneyadviceservice.org.uk/en/articles/ planning-what-to-leave-in-your-will To advertise in The Villager and Town Life please call 01767 261122